Trying to understand pension changes and feeling out of my depth

Addlepate

Yorkie1 said:

I was moved by L&G without cost. I've had Civil service AVCs for just under 2 years, I think. I was given the choice about staying put, or choosing a different fund, but the default was to move me and others into the fund I've described as relevant to my age (I get state pension in 2037).

They did the 'swap' (not a technical term) in early July. The value in each (old and new) fund was the same before and after.

I aim to take the first part of my Civil service DB in late 2030 (or perhaps early 2031), with the rest in 2035. I haven't yet had a detailed discussion with my FA about how to fill that gap - from Cash ISAs, S&S ISAs, or the AVCs, although the original thought process in starting the AVCs was for that purpose (as well as to get down under the 40% tax band).

Thanks. That's all useful information. I made a decision on the swap (see below) but came very close to upping my retirement age and joining you in the 2035 - 2040 TDF.

Addlepate

All, thanks again for all your thoughts and advice.

Re. the default fund change, I decided to stay with the multi-asset scheme:

- I considered changing my retirement age to put me in the 2035 - 2040 TDF, which I thought was probably more suitable for me at this stage, but in the end felt I want to consider things further and understand my choices better before making a decision (and had a couple of technical obstacles changing my retirement age), and felt I shouldn't just jump because of the default fund change deadline.

- I felt asset mixes and performance were very similar - a few tenths of a percent on performance - between the multi-asset and 2030 to 2035 TDF, and the two funds were so close that the choice between them wasn't critical and either would have done short term until I've understood my options and needs better.

- I had some reservations about the 2030 - 2035 TDF and felt that of the two, it was probably slightly (albeit marginally) less suitable for me, and as it is de-risking might perhaps give slightly lower performance, albeit marginal.

I'd like to have understood from L&G why they thought the TDF is 'better', as my position is very different from someone younger and still very much in the growth phase, but no-one I could speak to seemed to have that information. To be honest I was a bit disappointed with L&G as it was quite difficult getting concrete information, and people kept telling me conflicting things.

To transaction costs, I decided it was probably unlikely they would be significant, if there were transaction costs due to a significant change in asset mix I'd probably be hit for those either way, and that it was quite possible I could end up changing funds again once I've looked at my options and needs better, so I felt what will be will be.